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Getting digital transformation right

Many people cringe at the phrase "digital transformation." Why? It’s partially because the term itself sounds like it was belched forth from the fires of Mount Marketing. But more so because a lot of people think digital transformation is powered by technology like Kubernetes, public cloud, artificial intelligence, storage arrays, or blockchain.

Tech does matter, of course. Where before enterprises were unsure if IT or technology mattered (hence the outsourcing trend of a decade ago), today’s companies are focused on how to solve complex technical problems in software. But digital transformation is much more about fostering a culture that frequently ships new software, craves customer feedback, iterates constantly, and delivers customer value. This means placing focus on user intent, eliminating waste in the customer experience, respecting people, and fast flow.

Let's take an example: say someone wants to go on holiday and relax. There are countless microtransactions or activities involved when finding plane tickets, booking accommodations, finding a pet sitter, locking up the house, getting to the airport, and so on. People want to spend as little time as possible on those activities, and more on the value they are after, in this case, relaxation. Digital transformation should be about helping facilitate this.

Companies that are getting digital transformation right have five characteristics to their success:

1. Choosing the right technology to support growth

Companies have more options than ever before when it comes to technology. Great news, right? Not necessarily. The deluge of technology often overwhelms leaders and distracts from their mission. The companies winning in digital transformation navigate through the hype and give their teams a focused set of technologies to deliver business and customer value quickly and constantly.

When it comes to choosing technologies, businesses must narrow down which application frameworks matter most to them, which databases to bet on, and one or two cloud platforms that make sense. This allows companies to still evaluate new, emerging technologies, but avoids them getting lost in evaluating technology in mature categories.

2. Putting user design at the heart of product development

It doesn’t matter if enterprises build things right if they build the wrong things. How will they know they are over-processing the user experience if they don't know the user goals? How will they learn what frustrates customers most if they don't talk to them? We’ve seen some of the world's largest brands take this to heart. Companies that focus more on customer empathy win.

Businesses should seek to identify, test and validate their assumptions throughout the product development process. For example, they could begin by exploring the problem space through user and stakeholder interviews and market research. They can then validate and narrow down the problem space for the first release.

By prototyping ideas for that first release, companies should then test those prototypes with real users and start development when they have a higher level of confidence in the initial set of features. They can then continue to learn and iterate with user feedback throughout the development process to de-risk the product and execution.

3. Rethinking data integrations

Many companies have jumped on the artificial intelligence and machine learning bandwagon. However, it won't happen if they don't have a great data ingestion and processing story.

We are seeing more and more stream processing and event-driven architectures, along with modernising existing data flows to evolve from batch to real-time processing. This impacts connections to on-premises systems, cloud platforms, and partner systems.

Doing it well reduces waste and lets businesses act, faster. If companies have a more accurate picture of what’s happening, they can deliver a more timely, useful experience to customers.

4. Accelerating time-to-market

In lean, inventory is bad. The same applies to software teams. Code is only truly valuable when it's in production and companies are learning from those using it. If businesses are serious about digital transformation, they must ensure that software is on continuous integration and continuous delivery pipelines. This gets value into the hands of their customers faster, which means they have more chances to impress them than their competitors do.

5. Making the right investment

There is no such thing as a free lunch; everything costs something, and digital transformation is no exception. However, because big businesses have greater financial resources does not mean that money and resource should be thrown around with wild abandon to get ahead.

Larger organisations should make a clear financial commitment to transformation efforts, but this should be done with forethought and a clear strategy in mind. Look at how venture capitalists operate – modelling innovation and making the financial investment necessary to support this work.

Today’s successful businesses are those bringing a digital-first approach to the heart of their strategy. Through new applications, services, and software, businesses will find innovative ways to answer traditional customer demands. Digital – and the convenience it offers – is now the differentiator; organisations not embracing this revolution will fall behind as competitors use technology to prepare their operating model for the world we now live in.

Transitioning a traditional enterprise into a modern software company means not taking infrastructure for granted, but rather moving to modern platforms that promote and enhance an organisation's core expertise and values. Digital transformation also must include wide-reaching organisational change to foster true disruption, including the adoption of agile and lean methodologies as replacements for traditional approaches to how software and services are built and delivered.

Although it’s impossible to predict when any business will succeed, those undertaking digital transformation have a strong chance of success. Why? Because they are building a competitive advantage by rethinking existing processes and transitioning to new, agile development methods that focus on delivering customer value.